The US and European Union also announced a raft of new penalties to limit the trade of arms and technology that can be used in the oil industry and for military purposes.

The EU also put its capital markets off limits for Russian state-owned banks.

US officials said roughly 30% of Russia's banking sector assets would now be constrained by sanctions.

US and European leaders said they are prepared to intensify sanctions unless it moves to de-escalate the crisis in Ukraine. In a statement this evening, the G-7 leaders said:

Russia still has the opportunity to choose the path of de-escalation, which would lead to the removal of these sanctions. If it does not do so, however, we remain ready to further intensify the costs of its adverse actions.